California’s Penalty for Driving without Insurance is Nearly Toothless

Are the fines for driving without auto insurance in California strict enough? According to a recent report that compares the penalties throughout the nation, the answer is no (http://www.onlineautoinsurance.com/).  Most states have much more brutal penalties and many with these strict penalties have far fewer uninsured drivers. Of course strict laws do not ensure that people will buy car insurance; but for a state with so many uninsured drivers, strict laws that more aggressively discourage uninsured driving may be appropriate.

California drivers with no insurance face no more than a $200 fine for a first offense or $500 for second and subsequent offenses (http://dmv.ca.gov/pubs/vctop/d07/vc16029.htm).  In some states, a first offense carries a $500 fine and a driver can lose their license for up to a year; most states have some degree of license suspension. California does not (http://www.eurweb.com/2012/09/oai-analysis-drivers-in-california-face-relatively-weak-fine-for-driving-without-insurance/).  California does allow police to tow and impound an uninsured driver’s car at their expense but it is one of the few states that have no license restriction penalties. Would harsher laws motivate more people to buy car insurance in California?

Many people in California do not pay for insurance for financial reasons. Though perhaps an understandable complaint especially in today’s grim economy, empathy does not alleviate the problem of uninsured drivers and the harm they may cause to insured drivers. In order to protect drivers from the catastrophe of an accident with someone who has no insurance, all California drivers are offered Uninsured/Underinsured Motorist protection. This does cost a tiny bit more but it is nearly an automatically included coverage in most California policies. It is supposed to protect a driver in case of accident with an uninsured motorist. Thus, perhaps the problem of uninsured motorists is not so bad as long as other drivers absorb the cost. But this adds to everyone’s premiums and does not encourage those uninsured drivers to purchase high levels of insurance. There is an effort in the state to make insurance more affordable. Perhaps this would reduce the amount of people who drive without insurance. Perhaps.

Proposition 33 will give drivers a discount if they have carried car insurance continuously for a certain period of time. Presently, there is a discount available for continuous coverage but the savings are passed to the insurance company rather than the individual driver. To get the discount, the driver must stay with their current insurer. This proposition seeks to change that.

Proponents of Proposition 33 claim that the discount for following the law will encourage more people to get insurance. Opponents argue that it will discourage people who are currently uninsured from joining the ranks of the insured because their costs will still be higher than other drivers.

Of course, whether Proposition 33 passes or not, this alone will not solve California’s uninsured motorist problem.

In “Why you don't have enough uninsured motorist coverage” by Karen Aho of carinsurance.com, she  makes the argument that the benefits often outweigh the risks for uninsured motorists when she asks these stark rhetorical questions that many Californians face: “Car insurance or rent? Car insurance or food?” (http://www.carinsurance.com/Articles/not-enough-uninsured-motorist-coverage.aspx?WT.qs_osrc=nas-142537210). This is perpetuated in California where the penalties for not having insurance are so low that paying the fine may be cheaper than buying the insurance. That is, of course, if the uninsured California motorist does not get in an accident. That’s the risk.

For a wide variety of reasons including the toothless penalties that California has for driving uninsured, drivers who want to protect themselves must continue to pay for insurance that covers them in case of an accident with one of the many uninsured or underinsured drivers on California’s roads. Most attorneys—personal injury and otherwise—who have a keen grasp of cost benefit analysis recommend making UIM coverage a priority. If a driver does have an accident with an uninsured motorist who is at fault, the UIM should provide the coverage needed. With UIM, the driver with insurance will be covered by their own insurance. In other words, the uninsured driver will have their responsibilities covered by the other driver’s insurance policy. Though the UIM may cost a bit more, it is indisputably worth the cost when a simple cost benefit analysis is conducted. However, consumers should be sure to check their coverage even if they do carry UIM. Just like any car insurance policy in California, the amount of coverage can vary widely and the bare minimum required by law will probably not be enough in the case of a serious California car crash. 

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